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Bankruptcy: What every broker and banker needs to know

Jan 28, 2008

Preparing for 2008John D. SvirskyMortgage Broker, John D. Svirsky, mortgage crisis, changes, challenges Theres a wonderful prayer/affirmation called the "Serenity Prayer," maybe you know it. "God grant me the serenity to accept the things I cannot change, courage to change the things I can and the wisdom to know the difference." When I think about 2008, this is what comes to mind; so, I am going to use this as a theme for this month's article. I have been through many down markets in the 27 years I've been a Mortgage Broker. It is true that maybe none as daunting as this one, but I started in this business when Jimmy Carter was president and interest rates went as high as 21 percent. We survived then, and we will now. It is also true that way back then, my monthly expenses were a lot less--Jeanne and I simply looked at it as the price of admission. Funny, all these years later, we look back at those times fondly because we looked fear right in the eye, met the challenge and I went on to create a prosperous business that has survived and prospered for 27-plus years. I have learned the value of staying power: Offer serenity. I have observed that down markets last, at most, 12 to 18 months, and for those of us who can tighten our belts, the other side promises prosperity and abundance, yet again--and most likely duplicating many of the mistakes, yet again. Accept the things I cannot change. There is so much that I cannot change in my world. There is nothing I can do about the banking crisis. There is nothing I can do about the sub-prime market turmoil. There is nothing I can do about how the lenders are changing the underwriting criteria almost weekly to the point that if your borrower does not have a credit score of 720 or above, even the sub-prime lenders are shying away. There is nothing I can do about how many of my lenders have gone out of business or made it so hard to do business with them they might as well be out of the market. There is nothing I can do about the media trying to blame this crisis on Mortgage Brokers as if it was our fault that Wall Street created easy credit deals that are now coming back to haunt us. I cannot change the negative perception of the real estate market, which reminds the public of how bad things are and that they would be foolish to buy real estate; if they did, they better get it at a substantial discount. I cannot change the banks challenging even the simplest of appraisals and giving values below what my customers are legitimately paying for their new house. I cannot change our countrys economic policies, which have turned us from a surplus to biggest debtor country. I cannot change the price of oil and how that will impact our economy and, therefore, the housing market and trickle down to my mortgage business. I could go on and on, but you get the idea. You and I are pretty powerless about what is going on. More than 100,000 mortgage professionals, voluntarily or not, have left our industry in 2007. For them, the change was too much to handle, and they were not willing to go beyond the obstacles, or go beyond the fear. Courage to change the things I can. First and foremost, the one thing that I can and must change is my attitude. I refuse to let the media brainwash me into fear and negativity. At the same time, I must be realistic about the marketplace. If your marketplace is not doing well, there are places that are. These are specific actions I have and am doing in my life right now; maybe some will be of help for you too. Please also share with me what is working for you. The one thing I have learned is that, although at the end of the day each of us is responsible for our own lives, we cannot do it alone. The more we help each other, the better each of us becomes. Ironic when so many of us have been trained to do it alone, to not share information because someone may use it against us. There is such a great feeling in helping other brokers. I freely share my lenders and resources with others, and sometimes, they will do the same with me as well. (By the way & which lender will do a no-income check with a 580 score?) I recently was helping a client who was referred to me by an attorney, and I needed a previous U.S. Department of Housing and Urban Development (HUD) report. Since the borrower did not have it, the borrower and I called the previous Mortgage Broker that first refused to send it to me, although he did have it, and told the client: How dare you use another Mortgage Broker. When the client and I got off the phone with the other Mortgage Broker, the client said to me that he would never use him again and how short-sighted that Mortgage Broker was not to send me the HUD. I made a customer for many deals and referrals to come because I went the extra mile and got the HUD from another source, which cleared the condition and the deal closed on time. I have taken to writing two or three handwritten letters per week thanking someone and sharing that I appreciate them. It could be a client, it could be a co-worker and it could be someone in the bank's back office. Acknowledging something good or something that someone went out of their way to help me with is one way I have gotten out the negativity. The more I focus and appreciate the positive things that are happening, the more positive things seem to happen in my life. I have done something very novel and challenging. I am stepping outside of the mortgage industry for a brief period just to allow myself time to step outside. You cannot see the forest through the trees. Rather than keep on doing the same old, same old, I felt it was important to ask myself some very challenging questions: ++Why did I become a Mortgage Broker? Are those reasons relevant today? ++What was the desired result I wanted from being a Mortgage Broker? ++Can I receive the same desired result from other jobs or industries? ++Who is doing what I would like to be doing? ++Are there other parts of the country or world where I would prefer to be? ++Can I do what I love to do there? ++If money and financial obligations were not a factor, how would I spend my time each day? ++Outside of my business, what hobbies and areas of interest would I like to pursue that I have not felt I had the time to do? ++Outside of my business, what courses or seminars would I attend just to broaden my horizons--especially if it had nothing to do with mortgage brokerage? ++What actions can I take to help me live a more balanced and emotionally fulfilling life? These are just a few of hundreds of questions that I have asked myself and taken the time to write about. For one of the few benefits of having fewer deals to work on is that I can take time to write and think about my future. Which reminds me of one of the first lessons they teach in racecar driving school: When you are spinning out, do not focus on where the car is crashing toward; focus on where you want the car to go. Focus on the destination. Too few of us take the time to be still and ask ourselves personal and important questions like, "Why do I do what I do? Why do I live where I live?" The mind says: Because we need the money, because we always lived here. Maybe it is time to challenge our pre-conceived notions and habits and ask whatever you believe in for the courage to change. Mother Nature is a great teacher. When something becomes unbalanced, she creates a hurricane, tornado, tsunami or anything, which wipes out an entire area so that it can begin again. Life doesn't stop; it just forces us to change and to live it differently. It might hurt like hell, but in the long run, it not only forces us to change our direction, but also makes us stronger. In my opinion, that is what the mortgage crisis has done for me. It hurts like hell, but it is forcing me to change what I can, accept what I cannot change and ask for the wisdom to know the difference. John D. Svirsky has been a Mortgage Broker for 24 years, doing both commercial and residential mortgages. He is also a volunteer firefighter, avid cigar enthusiast and cook. He may be reached by phone at (845) 424-3388 or e-mail [email protected].
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